Nike Gets Prime Athens Space for 43% Less Than Last Tenant

Nike, named after the Greek goddess of victory, agreed to lease 775 square meters from the state-controlled Greek civil servants pension fund, according to CBRE Atria, the CB Richard Ellis Group Inc. Greek unit that acted for Nike on the deal. Photographer: David Paul Morris/Bloomberg

Jan. 19 (Bloomberg) -- Nike Inc., the world’s largest
sporting-goods company, agreed to rent prime retail space in the
center of Athens for at least 43 percent less than the previous
tenant, according to an adviser on the transaction.

Nike, named after the Greek goddess of victory, agreed to
lease 775 square meters (8,300 square feet) from the state-controlled Greek civil servants pension fund, according to CBRE
Atria, the CBRE Group Inc. unit that acted for Nike on the deal.

Greece’s economic crisis is prompting banks, local
businesses and other owners of commercial real estate to close
branches and stores, offering opportunities to foreign companies
with cash to spend. Greek retail sales plunged 8.1 percent in
October from a year earlier, the 16th consecutive monthly
decline, the Hellenic Statistical Authority said.

“International retailers are taking advantage of lower
rents and higher vacancy rates in Greece to establish networks
that they couldn’t have created previously,” said Yannis
Perrotis, managing director of CBRE Atria in Athens.

Nike, via local partner Folli Follie Group, is paying
57,000 euros ($73,000) a month for the first year to lease a
ground floor, mezzanine and two basements in the building at 1
Ermou Street and Syntagma Square, CBRE Atria said. That compares
with more than 100,000 euros paid by previous tenant Geniki Bank
SA, the Greek unit of France’s Societe Generale SA.

Calls to Nike’s European office in London seeking comment
weren’t immediately returned.

Two Years Empty

The Ermou Street premises had lain empty for almost two
years before Nike opened its store in December, Perrotis said.
The building also contains the Greek Ministry of Finance, the
Syntagma Square post office and a shoe store.

“This is a sign of things to come as the state becomes
more in tune with the reduced level of consumption and older
tenants can no longer afford to pay rents,” Perrotis said.

Clothing and footwear sales in Greece dropped 28.3 percent
in the year through October, according to the statistical
authority. Furniture and electrical and household equipment fell
16.9 percent. Last year Kou-Kou SA, Greece’s second-biggest toy
retailer, filed for creditor protection amid falling sales.
Expert SA, the Thessaloniki-based electronics retailer, also
filed for protection.

Vacancies Increase

Commercial-property vacancies in the center of Athens rose
to 24.4 percent in August from 18 percent a year earlier,
according to the most recent survey by the National
Confederation of Commerce, conducted from July 25 to Sept. 6.
Twenty-two percent of businesses remained shut in Athens during
the period.

Higher vacancies in prime areas have contributed to a 15
percent drop in rents from a year earlier, Eri Mitsostergiou an
Amsterdam-based analyst at Savills Plc said in a November note.

Greek gross domestic product may show “anemic” growth
starting in 2013 after a 7.4 percent contraction in 2011 and a
likely drop of about 2 percent this year, Savills said.

CBRE Atria’s Perrotis expects more international retailers
to open in Europe’s most indebted country even as the government
awaits a final outline on a voluntary swap of the country’s debt
with private creditors that may decide the nation’s future.

“We’ll know the outcome of private sector involvement
before year-end,” he said. “After that, Greece’s economy will
move on to recovery, so large internationals are positioning
themselves now for a future change in the downward trend of
consumption.”